Re publ i kaekos ovë s Re publ i kakos ova Re publ i cofkos ovo Qe v e r i a Vl a d a Go v e r nme nt Mi ni s t r i aefi na nc a v e-mi ni s t a r s t v oz afi na ns i j a-mi ni s t r yo ffi na nc e Th e s a r iiko s o v ë s Tr e z o rko s o v a-tr e a s ur yo fko s o v a ANNUALBUL L ETI N 201 7 ONPUBL I CDEBT De btmanage me n tdi v i s i on Apr i l, 2018
2 Table of content Abbreviations... 3 INTRODUCTION... 4 TOTAL DEBT... 5 1.1 Total Debt Stock 2009-2017... 6 1.2 Total Debt Service 2009-2017... 8 1.3 Debt Prepayment... 9 INTERNATIONAL DEBT... 10 2.1 International Debt Stock... 11 2.2 New International Loans - 2017... 12 2.3 Disbursement of International Loans... 13 2.4 International Debt Service... 14 2.5 International Debt portfolio by currency... 15 2.6 International Debt portfolio by type of interest... 16 DOMESTIC DEBT... 17 3.1 Domestic Debt Stock... 18 3.2 Domestic Debt Service... 18 3.3 Domestic Debt by instruments... 19 3.4 Average interest rates... 20 3.5 Holders of Government Securities... 21 STATE GUARANTEES... 22 4.1 State Guarantees... 23 Annex 1. Disclosure of International Loans... 26 Annex 2. Financial terms and conditions of International Loans... 28 Annex 3. Loans Withdrawals over the years... 31 Annex 4. Debt Service over the years... 33 2
3 Abbreviations BRK Budget of the Republic of Kosovo CLC Consolidated Loan C DIFK Deposit Insurance Fund of Kosovo DIN Islamic Dinar EBRD European Bank for Reconstruction and Development EC European Commission EIB European Investment Bank EURIBOR Euro Interbank Offered Rate GDP Gross Domestic Production IsDB Islamic Development Bank IBRD International Bank for Reconstruction and Development IDA International Development Association IMF International Monetary Fund KfW German Bank for Development KSA Kosovo Statistics Agency LIBOR London interbank offered rate MAFRD Ministry of Agriculture, Forestry and Rural Development MED Ministry of Economic Development MESP Ministry of Environment and Spatial Planning MEST Ministry of Education, Science and Technology MF Ministry of Finance MH Ministry of Health MI Ministry of Infrastructure MTI Ministry of Trade and Industry NATIXIS French Republic Representative for investment PPRC Public Procurement Regulatory Commission OFID OPEC Fund for International Development SAR Saudi Riyal SDR Special Drawing Rights SFD Saudi Fund for Development UniCredit UniCredit Bank Austria USA United States of America WB World Bank 3
4 INTRODUCTION Based on the Public Debt Law no. 03/L- 175 and Regulation GRK - no. 22/2013 on Procedures for Issuance and Management of State Debt, State Guarantees and Municipal Debt, in order to increase transparency on State Debt data, Kosovo Treasury publishes the third Bulletin with the data on total State Debt covering the period from the establishment of the state debt portfolio in 2009 to the end of the fiscal year 2017. According to Law on Public Debt, Total Debt is defined as the total of the State and Municipal Debt. State Debt is the debt that is taken on behalf of the Central Governmental Institutions which the Republic of Kosovo is obliged to repay, but shall not include any obligation of other certain government entities, including but not limited to Municipalities, public enterprises, or Central Bank of Kosovo. Furthermore, the State Debt is divided into domestic debt and international debt. "Domestic debt is defined as the State debt subject to the laws of the Republic of Kosovo whereas the International Debt as the State Debt which is subject to agreement with foreign governments, government agencies, international financial organizations or other organizations and foreign companies on the basis of international agreements, treaties, conventions or other similar agreements subject to the laws of a legal jurisdiction other than of the Republic of Kosovo. The State Debt portfolio by the end of 2017 is comprised of the Domestic Debt and International Debt, and three State Guarantees. So far, Kosovo does not have Municipal Debt or Municipal Guarantees issued. The Bulletin also discloses historical data since the establishment of the State Debt portfolio. The bulletin is composed of four parts, in the first part are presented data on the Total Debt, in the second part are presented data on International Debt, the third part presents data on Domestic Debt and in the last part are presented data on State Guarantees. All the values stated in this document are presented in millions of Euro, unless otherwise stated. 4
5 TOTAL DEBT 5
6 1.1 Total Debt Stock 2009-2017 Kosovo s State Debt Portfolio was established in 2009. At that time, the portfolio was comprised of only one loan called Consolidated Loan C from the World Bank. The total amount of this loan was 381.21 million euros. The CLC loan is inherited from the former Yugoslavia as part of the State Debt of Kosovo. This loan was inherited with three tranches/parts in roughly equal amounts as presented in Table 1. This was the first state loan of the Republic of Kosovo, to continue in the coming years with new loans borrowed from various creditors. New loans were intended to finance projects in strategic sectors such as education, agriculture, cadaster, energy, health, water, district heating, banking system, roads and railways rehabilitations, as well as budget support. Annex 1 discloses all projects that are financed through state borrowings. Meanwhile, since 2012 the issuance of Securities of the Republic of Kosovo started to contribute to the total debt increase. Tranche Outstanding Debt Table 1. Details of CLC credit (inherited in 2009) Interest rate before 0.25% interest rate waiver** Type of interest LIBOR WB Fee * This tranche is fully prepaid. ** Interest waiver is determined annually by the Bank's Board of Executive Directors. *** LIBOR rate is determined every six months on loan payment dates (March 15 and September 15), but since March 2013 the rate is fixed at 3.13%. Interest rate after 0.25% interest rate waiver 1 128.15 2.35% Variable*** 1.80% 0.55% 2.10% 2* 126.53 2.35% Variable 1.80% 0.55% 2.10% 3 126.53 5.81% Fix - - 5.56% As seen in Figure 1, Total Debt has had mainly an incremental trend in nominal values, where for 2010 the debt has increased largely as a result of withdrawals from loans - disclosure of withdrawals for projects is presented in Annex 3. In 2011 Total Debt has decreased compared to the previous year, as this year the state debt amortization has been higher than the withdrawals from contracted loans. In 2012, the Total Debt has increased markedly, for two reasons: the first, the receipt of three tranches from the Program with the IMF for nearly 93.6 million, which program was achieved during 2012; and the second, the implementation of domestic debt market, that is, the beginning of the 6
2009 2010 2011 2012 2013 2014 2015 2016 2017 Milion Euro (% e BPV) 7 issuance of the Government Securities of the Republic of Kosovo in the amount of 73.3 million Euros. While, in 2013 and 2014 Total Debt has upward trend mainly as a result of issuance of Securities of the Republic of Kosovo. At the end of 2014, Total Debt marks the amount of EUR 582.87 million and compared to the nominal amount of the previous year has increased for 22%, and this also largely due to new issuances of Securities in the amount of EUR 104 million. Also, during 2015 Total Debt increased by 28% compared to the previous year, thus recording the amount of EUR 748.95 million. The increase is mainly due to new issuances of Government Securities in amount of EUR 121 million, and the receipt of first tranche of the new IMF Program, amounting to EUR 36 million, agreed in 2015 Whereas, the debt at the end of 2016 marks the amount of EUR 852.74 million, and if compared with the nominal amount of the previous year, it increased by 14%. This increase is mainly due to new issuance of Securities in the amount of Euro 101 million. At the end of 2017 the Total Debt amounted to EUR 996.42 million, and compared with previous year has increased for 17%. The increase is mainly as a result of the two IMF Program tranches withdrawals in amount of EUR 100.37 million from 2015 IMF Program, and as of Government Securities new issuance in amount of EUR 95.30 million. In addition to withdrawals which can be seen in Annex 3 for each loan, there were also loans repayment of 58.63 million, details of loan repayments are presented in Annex 4. Figure 1. Total Debt Stock (2009-2017) 1,200.00 1,000.00 800.00 600.00 20% 15% 10% Figure 2. Composition of Total Debt 2017 400.00 200.00 0.00 5% 0% 58% 42% Total Debt Total Debt (% of GDP) International Debt Domestic Debt 7
8 International Debt Table 2. Total Debt 2009 2010 2011 2012 2013 2014 2015 2016 2017 249.01 260.08 253.71 336.60 323.76 326.35 371.17 373.77 422.15 Domestic Debt 0.00 0.00 0.00 73.31 152.51 256.52 377.78 478.97 574.27 Total Debt 249.01 260.08 253.71 409.92 476.27 582.87 748.95 852.74 996.42 State Guarantees 0.00 0.00 0.00 0.00 0.00 10.00 10.00 20.00 44.00 Total Debt (% of GDP)* 6.12 5.92 5.27 8.10 8.94 10.65 13.07 14.58 16.63 GDP 4,070 4,402 4,815 5,059 5,327 5,567 5,807 5,985 6,257 Note: International debt changes over the years as a result of exchange rate fluctuations. The GDP values for years 2009-2016 are taken from the website of the Kosovo Agency of Statistics, for 2017 is taken from Budget Review Law 2017. * Calculation of indicators includes guarantees. 1.2 Total Debt Service 2009-2017 The Republic of Kosovo continuously repays the debt in full and timely, and treats payment request with high efficiency under the applicable financial arrangements and the legal basis for debt service. All payments are processed by Budget of the Republic of Kosovo respectively the Treasury/DMD (Debt Management Division). Furthermore, during 2010 and 2011, the debt service for inherited loan of the Republic of Kosovo has been assisted by the USA and Swiss State. USA assisted in payment of instalments in the amount of EUR 17.9 million and the Government of Switzerland in the amount of EUR 0.5 million. Table 3 below presents the State Debt service over the years from Budget of republic of Kosovo, divided into principal, interest and other fees. Table 3. Total Debt Service 2009 2010 2011 2012 2013 2014 2015 2016 2017 Debt Service 9.22 19.68 20.77 21.42 25.47 34.88 44.88 85.20 77.31 Principal 8.48 10.68 11.99 11.34 13.99 22.05 28.87 65.99 58.63 Interest 0.74 8.59 8.68 9.26 11.35 12.46 15.63 18.70 18.34 Other fees 0.00 0.41 0.10 0.82 0.13 0.37 0.37 0.50 0.34 Debt service /Total Revenues (%) 0.80 1.67 1.59 1.39 1.78 2.41 2.65 4.82 4.39 8
9 1.3 Debt Prepayment In 2009 the Government of Kosovo prepaid the second tranche of the CLC in the amount of EUR 123.71 million. In this case the amount of EUR 34.59 million was paid by the BRK, while the rest by US and the EC, namely the United States contributed with the amount of USD 125 million USD or converted in Euro 84.12 million, and EC with EUR 5 million. Table 4. Credit tranche payment of the CLC in 2009 Year 2009 Total prepaid amount 123.71 BRK 34.59 Donors 89.12 -USA 84.12 - European Commission 5.00 9
10 INTERNATIONAL DEBT 10
11 2.1 International Debt Stock During 2017 the International debt has increased for 13% compared to previous year, this is because throughout the year significant amounts of IMF loan and projects loans were withdrawn. Highest amount withdrawn were made by IMF and KfW throughout 2017, as can be seen in Annex 3. As of end of 2017 International Debt marked the amount EUR 422.15 million, which represents 49.6% of Total State Debt or 6.75% of GDP. Most of or 76% of the International Debt portfolio is toward owed to the IBRD and IMF. Figure 3. International Debt by creditors 2017 Figure 4. International Debt by loan category 2017 13% 0% 2% 37% 15% 38% 10% 85% IBRD IDA IMF UniCredit KfW IsDB Multilateral loans Bilateral loans Table 5. International Debt by creditors, over the years Creditor 2009 2010 2011 2012 2013 2014 2015 2016 2017 IBRD 249.01 238.33 226.34 215.00 203.66 192.33 180.99 169.65 158.32 IDA 0 0 5.06 8.41 12.37 20.84 28.86 36.02 41.12 IMF 0 21.76 22.26 113.05 105.73 101.73 127.74 113.96 160.77 UniCredit 0 0 0 0 0 2.00 2.96 6.49 7.04 KfW 0 0 0.05 0.14 2.00 9.46 30.62 47.64 54.81 IsDB 0 0 0 0 0 0 0 0 0.10 Total 249.01 260.08 253.71 336.60 323.76 326.35 371.17 373.77 422.15 Note: International Debt changes over the years as a result of exchange rate fluctuations. Debt in foreign currency is converted with the exchange rates at the end of the period. 11
12 2.2 New International Loans - 2017 During the year 2017, five new financial agreements were negotiated and signed, two of them in the water sector respectively for water supply and sewage treatment, and the other three in the sectors of agriculture, trade and road infrastructure. Two of them have been ratified by the Kosovo Assembly, and three others are expected to be ratified at the beginning of 2018. The following table presents the new loans signed in 2017. Data on financial conditions for these loans, as well as for other loans that are ratified by the Assembly of the Republic of Kosovo are presented in Annex 2. Table 6. New International Loans 2017 Loan/Project Creditor Agreement Date Borrow Type Currency Amount Implementing Agency Status Wastewater Treatment Project Water Security and Canal Protection Project Competitiveness and Export Readiness Project Additional Financing for Agriculture and Rural Development Project NATIXIS 19.1.17 EUR 66.00 DB MESP Ratified IDA 27.1.17 EUR 22.00 DB, OL MED Ratified IDA 02.8.17 EUR 14.30 DB MTI Ratified IDA 02.8.17 EUR 20.80 DB MAFRD Ratified Kijeve-Zahaq Highway EBRD 18.12.17 EUR 71.00 DB MI Not ratified Note: DB - Direct Borrow, OL-On - Lent Loan 12
13 2.3 Disbursement of International Loans During 2017, the third and fourth tranches form IMF Program, which was agreed in 2015, were disbursed. Budget Organizations which fund projects from the International Debt have also continued to withdraw funds from loans. The same applies for public companies which have continued to withdraw funds from on-lent loans by the Ministry of Finance, as can be seen in Annex 3. The following table shows the withdrawals of loans by creditor over the years. Table 7. Disbursement of Loans by Creditor Creditor 2009 2010 2011 2012 2013 2014 2015 2016 2017 IDA 0 0 5.08 3.51 4.42 7.37 6.54 7.01 7.95 IMF 0 22.09 0 93.64 0 0 35.64 35.62 100.38 UniCredit 0 0 0 0 0 2.00 0.96 3.54 0.55 KfW 0 0 0.05 0.08 1.86 7.46 22.49 22.47 13.40 IsDB 0 0 0 0 0 0 0 0 0.10 Total 0 22.09 5.13 97.23 6.28 16.83 65.62 68.64 122.38 Note: International debt changes over the years as a result of exchange rate fluctuations. For withdrawals from the loans that are in foreign currency, is used the exchange rate on the day of the transaction. 13
14 2.4 International Debt Service During 2017 for the International Debt service were paid the amount of EUR 70.63 million, which represents 4% of budget revenues in 2017. Annex 4 shows that about 62% of the paid amount is debt service to IMF, whereas 26% is debt service to the IBRD and 12% to other creditors. The following table 8 presents the debt service divided by principal, interest, commitment fees and other fees. Table 8. International Debt Service, over the years International Debt Service 2009 2010 2011 2012 2013 2014 2015 2016 2017 9.22 19.68 20.77 20.76 24.28 32.37 39.38 77.29 70.63 Government 9.22 9.50 0.73 0.41 4.15 1.83 7.14 0.15 2.41 - Principal 8.48 10.68 11.99 11.34 13.99 22.05 27.54 60.55 - Interest 0.74 8.59 8.68 8.60 10.14 9.71 9.35 9.20 - Commitment fee - 0.11 0.06 0.00 0.01 0.01 0.06 0.18 (0.18) - Other fees 0.11-0.47-0.07 0.18 0.23 0.50 Public Institutions to which the MoF has on-lent - 0.18 0.04 0.35 0.13 0.54 2.24 7.13 8.23 - Principal - - - - - - 1.33 5.45 6.24 - Interest - - - 0.00 0.02 0.25 0.79 1.59 1.97 - Commitment fee - 0.01 0.04 0.10 0.12 0.14 0.13 0.07 0.02 - Other fees - 0.17-0.25-0.15-0.02 - Debt service/total revenues (%) 0.80 1.67 1.59 1.35 1.70 2.23 2.33 4.37 4.01 Note: Other fees are paid by budget appropriation for interest payments. 14
15 2.5 International Debt portfolio by currency International debt portfolio is currently composed of three currencies, Euro, SDR 1 and DIN. The Government of Kosovo has contracted and ratified loans in the currencies of USD and SAR, but withdrawals of the respective loans have yet not started, as can be seen in Annex 1. Table 9. Debt Stock in foreign currency Cred -itor 2013 2014 2015 2016 2017 IDA 7.7 13.0 18.0 24.9 28.4 IMF 66.2 63.7 79.0 78.7 111.1 IsDB 0 0 0 0 0.07 Total 73.9 76.7 98.0 103.6 139.5 At the end of 2017, about 33% or 139.5 2 million Euros of International Debt portfolio is debt in SDR currency, mainly borrowed from the IMF, while the remaining portion of about 67% is borrowed in Euro currency from other creditors. Figure 5. International Debt by currency 2017 Figure 6. International Debt stock in foreign currency 2017 33% 0% 20% 67% 80% SDR EUR IDA IMF IsDB 1 The SDR is a pool of currencies which consists of the following currencies: EUR, USD, GBP, JPY and CNY. The value of SDR is determined based on an average which is drawn from the values of the above mentioned currencies. A review of the SDR basket is conducted every five years by the IMF-s Executive Board. As its November 2015 review, the Board decided to include the Chinese renminbi in the SDR basket as a fifth currency, effective 1 October 2016. 2 It is the net exposure value, which implies the amount of exposure excluding the Euro component. With the inclusion of the Chinese renminbi on October 1, 2016, the formula has changed and now the turnout in the new "basket" of the euro is 30.93 percent. 15
16 2.6 International Debt portfolio by type of interest Debt portfolio part which has the variable rate is composed of debt to the IMF. Hence at the end of 2017, about 38% of International Debt portfolio is exposed to variable interest rate. Table 10. Amount exposed to variable interest rate 2013 2014 2015 2016 2017 Fix 218.0 224.6 243.4 259.8 261.4 Figure7. International Debt exposed to variable interest 2017 38% Interest Variable 105.7 101.7 127.7 113.9 160.8 62% Total 323.7 326.3 371.1 373.7 422.2 Fiks Variable 16
17 DOMESTIC DEBT 17
18 3.1 Domestic Debt Stock The Republic of Kosovo has started the issuance of its Securities since January 2012. Market development has proved to be fairly successful in terms of investor's interest and borrowing costs where this type of borrowing has contributed as the main catalytic for financing the budget deficit. At the end of 2017 Domestic Debt marked EUR 574.27 million which represents 58% of total State Debt or 8.96% of the GDP. Since the domestic debt portfolio was established in 2012 and the base is relatively low, the relative increase from year to year appears to be quite high at the begging; 108% in 2013, and 68% in 2014, 47% in 2015, 27% in 2016, and 20% in 2017. Table 11. Domestic Debt Domestic Debt (net) 2012 2013 2014 2015 2016 2017 Debt Stock 73.31 152.51 256.52 377.78 478.97 574.27 New Issuances 73.31 79.20 104.01 121.26 101.19 95.30 Note: Issuances and stock are reflected in the net value 3.2 Domestic Debt Service Since the Republic of Kosovo operates with a budget deficit, whereby the MoF through the Medium Term Expenditure Framework (MTEF) has not foreseen the amortization of Domestic Debt, then the Treasury/MoF aside from conducting auctions for raising new funds from Securities Issuances, it also conducts auctions for re-financing financial instruments of domestic debt which mature. As a result, in the following table 12 and 13 are shown the amount issued for refinancing, and interest payments on Securities since the establishment of the market in 2012. Whereas, table 14 disclosed interest payments by instrument maturity, which has been over the years 2012-2017. Table 12. Refinancing amount 2012 2013 2014 2015 2016 2017 Refinancing amount 90.00 228.20 272.17 261.02 320.60 249.95 18
19 Table 13. Domestic Debt Service Domestic Debt 2012 2013 2014 2015 2016 2017 Interest payments 0.66 1.19 2.50 5.50 7.91 6.67 Principal payments 0 0 0 0 0 0 Interest/Total revenues (%) 0.05 0.09 0.17 0.32 0.45 0.38 Tabele 14. Interest payments by maturity Instrument 2012 2013 2014 2015 2016 2017 3 months 0.66 0.23 0.07 0.07 0.03 0 6 months 0 0.95 1.06 0.89 0.40 0.04 12 months 0 0 1.09 2.39 2.34 0.76 2 years 0 0 0.28 1.91 2.94 2.55 3 years 0 0 0 0.24 1.20 1.68 5 years 0 0 0 0 1.00 1.63 Total 0.66 1.19 2.50 5.49 7.91 6.67 3.3 Domestic Debt by instruments In the first year of the establishment of market, short term Securities were issued, mainly 3 and 6 months, whereas in the following years the issuing strategy contributed to the gradual extension of maturities. Thus, in 2013 were issued instruments with maturities of 12 months, to continue in 2014 with the issuance of instruments with a maturity of 2 years and further with maturities of 3 and 5 years through 2015. During 2016 the Treasury/MoF was focused on the issuing of new instruments with maturities of 2, 3 and 5 years. Table 15 shows the dynamics of instruments issued by maturity over the years. Table 15. Domestic Debt by instruments (nominal value) Instrument 2012 2013 2014 2015 2016 2017 3 months 30.00 15.20 9.75 10.00 10.00 0 6 months 44.00 84.00 57.67 48.60 30.00 24.95 12 months 0 55.00 140.10 150.00 160.00 135.00 2 years 0 0 52.00 126.95 159.95 175.00 3 years 0 0 0 30.00 70.00 110.00 5 years 0 0 0 15.00 50.00 110.00 7 years 0 0 0 0 0 20.00 Total 74.00 154.20 259.52 380.55 479.95 574.95 19
20 3.4 Average interest rates The following table shows the average interest rate on instruments as well as the interest rate curve for each instrument issued over the years. As can be seen in Figure 8, a normal yield curve is one in which longer maturity securities have the higher yield compared to shorter term securities due to the risks associated with time. Table 16. The average yield per instrument Instrument 2012 2013 2014 2015 2016 2017 3 months 2.52% 0.57% 0.56% 0.63% 0.21% 0.07% 6 months 2.71% 1.27% 1.34% 1.64% 0.25% 0.17% 12 months - 1.99% 1.72% 1.57% 0.48% 0.23% 2 years - - 2.76% 2.79% 0.83% 0.47% 3 years - - - 3.09% 1.63% 0.87% 5 years - - - 4.94% 2.49% 1.15% 7 years - - - - - 3.25% Figure 8. The yield curve per instrument, over the years 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 3 months 6 months 12 months 2 years 3 years 5 years 7 years 2012 2013 2014 2015 2016 2017 20
21 3.5 Holders of Government Securities According to the Regulation MF-CBK no. 01/2014 for the Primary and Secondary Market of Government of the Republic of Kosovo, besides the Primary Dealer and Primary Participants, also other natural and legal persons have the right to invest in Government Securities on Primary and Secondary Market of the Government of Kosovo. As a result, in addition to banks as Primary Dealer and the Pension Trust as a Primary Participant, the Government Securities are also held by other natural and legal investors (businesses and private individuals). The following table presents Securities Holders for 2015, 2016 and 2017. Table 17. Holders of Securities (nominal value) Figura 9. Holders of Government Securities Securities Holders 2015 2016 2017 2017 Commercial Banks 227.36 238.92 243.42 4%1% Pension Funds 95.87 79.93 104.10 35% 42% Public Institutions 26.56 127.33 198.74 Insurance Companies 20.36 20.25 21.52 Others 10.40 13.52 7.17 Banks Public Inst. 18% Pension Funds Insurance Comp. Total 380.55 479.95 574.95 Others Tenor 21
22 STATE GUARANTEES 22
23 4.1 State Guarantees At the end of 2017 the state guarantee portfolio was comprised from three state guarantees. In 2014 the Ministry of Finance issued the first guarantee in the amount of EUR 10 million, which guarantees DIFK for the credit line provided by the EBRD. This credit line has facilitated DIFK to increase the value of insured deposits from 2,000 to 3,000 euros per depositor. Whereas, the second international state guarantee, the Republic of Kosovo issued in 2016, through which guarantees the local public enterprise Urban Traffic for the loan provided by the EBRD in the amount of EUR 10 million. Initially this loan was guaranteed within Kosovo institutions, by Pristina Municipal Assembly. Through this loan was intended to advance the Urban Traffic in Pristina. Table 18. State Guarantees 2014 2015 2016 2017 State Guarantees 10.00 10.00 20.00 44.00 Guarantee for Credit Line of DIFK 10.00 10.00 10.00 10.00 Guarantee for Urban Traffic Pristina 0 0 10.00 10.00 Guarantee for Second Credit Line to DIFK 0 0 0 24.00 State Guarantee (% of GDP) 0.18% 0.17% 0.33% 0.70% 23
24 Table 19. Disclosure of State Guarantee Creditor Loans Loan Implementing Agency Agreement Date State Guarantee Amount Withdrawal by borrower 2016 Withdrawal by borrower 2017 Undisbursed Amount EBRD EBRD EBRD Guarante e for Credit Line of DIFK Guarante e for Urban Traffic Pristina Guarante e for Second Credit Line to DIFK DIFK 19.12.2013 10.00 EUR 0 0 Urban Traffic 24.06.2016 10.00 EUR 10.00 2.92 2.92 4.16 DIFK 22.12.2016 24.00 EUR 0 0 10.00 24
25 25
Annex 1. Disclosure of International Loans Creditor Loans/Project Name Direct Loans Implementing Agency Loan amount in original currency Loan Amount in EUR Withdrawa ls until 2016 Withdraw als in 2017 Committed Undisbursed IBRD Consolidated Loan C N/A 381.21 EUR 381.21 - - - IDA Public Sector Modernization Project MoF, MPA, PPRC 2.76 SDR 3.33 3.28 0.05 - IDA Real Estate Register and Cadastre Project MESP 4.00 SDR 4.77 4.56 0.21 - IMF Stand-By Arrangement 1 N/A 18.76 SDR 22.09 22.09 - - IDA First Sustainable Employment Development Policy Operation N/A 4.30 SDR 5.12 5.12 - - IDA Agriculture and Rural Development Project MAFRD 12.80 SDR 15.20 11.61 2.37 1.22 IDA Financial Sector Strengthening and Market Infrastructure Project I MoF 2.48 SDR 2.96 2.96 - - IMF Stand-By Arrangement 2 N/A 78.22 SDR 93.64 93.64 - - IDA Energy Sector Clean-Up and Land Reclamation Project MESP, KEK JSC 2.57 SDR 3.17 3.17 - - UniCredit Modernisation of the Kosovar Education System through e- Education MEST 4.93 EUR 4.93 4.38 0.55 - IsDB Financing the Upgrading of the Milloshevë-Mitrovicë M2 Road Project MI 13.20 DIN 15.67-0.10 15.57 OFID Upgrading of the Milloshevë-Mitrovica M2 Road Project MI 20.00 USD 16.64 - - 16.64 SFD High Speed Road Prishtina-Mitrovice Project MI 60.00 SAR 13.31 - - 13.31 IDA Health Project MH 16.50 SDR 19.60 0.09 2.11 17.40 IDA Energy Efficiency and Renewable Energy Project MED 20.10 SDR 23.87 0.94 2.75 20.18 IMF Stand-By Arrangement 2015 N/A 135.40 SDR 171.64 71.26 100.38 - IDA Kosovo Education System Improvement Project MEST 7.90 SDR 9.38 0.05 0.28 9.05 UniCredit Modernisation of the invasive cardiology services at the University Clinical Center of Kosovo MH 2.11 EUR 2.11 2.11 - - EBRD Kosovo Regional Roads MI 29.00 EUR 29.00 - - 29.00 EIB Route 10 Rail Rehabilitation MI, INFRAKOS 42.00 EUR 42.00 - - 42.00 IDA Water Security and Canal Protection Project MED, Iber- Lepenc Sh.A. 7.00 EUR 7.00 - - - NATIXIS Wastewater Treatment Project MESP 66.00 EUR 66.00 - - -
27 On-Lending Loans KfW Water Supply and Wastewater Disposal, Phase II KURP 6.00 EUR 6.00 4.65 0.74 0.61 KfW Improvement of Central Heating Systems TERMOKOS 5.00 EUR 5.00 5.00 - - KfW Municipal Water Supply and Wastewater Disposal in Pristina, Phase III KURP 20.00 EUR 20.00 18.49 1.51 - KfW 400 kv Transmission Line AL-KS KOSTT 17.00 EUR 17.00 17.00 - - KfW Improvement of Transmission Network KOSTT 20.50 EUR 20.50 9.27 11.15 0.07 IDA Financial Sector Strengthening and Market Infrastructure Project II CBK 1.82 SDR 2.26 2.13 0.13 - EBRD Kosovo Railway Route 10 Rehabilitation Project INFRAKOS 39.90 EUR 39.90 - - 39.90 Municipalities KfW Gjakova, Gjilani) Energy Efficiency Measures in Public Buildings at the Municipality (Ferizaj, Level in Kosovo Prishtina, 2.50 EUR 2.50 - - 2.50 IDA Water Security and Canal Protection Project Iber-Lepenc JSC 15.00 EUR 15.00 - - 15.00 Note: Withdrawals from the SDR currency loans are converted into the EUR currency at the spot rate of withdrawals, while for other undisbursed loans which are in the currency of SDR, USD, SAR and DIN is the exchange rate of 29.12.2017 (1SDR=1.1874Euro, 1DIN=1.1874Euro (source: www.imf.org); 1USD=0.83184Euro, 1SAR=0.2218Euro (source www.xe.com)). 27
28 Annex 2. Financial terms and conditions of International Loans Creditor Loans Direct Loans Agreement Date Ratification Year Loan amount in original currency IBRD Consolidated Loan C 29.06.2009 N/A 381.21 EUR Interest Rate Maturity 4.46% (5.81% and 3.13%) 22.00 IDA Public Sector Modernization Project 10.03.2010 2011 2.90 SDR 0.75% IDA Real Estate Register and Cadastre Project 10.03.2010 2011 4.30 SDR 0.75% IMF Stand-By Arrangement 1 21.07.2010 N/A 18.76 SDR 1% + SDR Interest Rate IDA First Sustainable Employment Development Policy Operation 11.03.2011 2011 4.30 SDR 0.75% IDA Agriculture and Rural Development Project 26.07.2011 2011 12.80 SDR 0.75% IDA Financial Sector Strengthening and Market Infrastructure Project I 03.08.2011 2011 2.48 SDR 0.75% 20.00 1% + SDR Interest Rate IMF Stand-By Arrangement 2 15.05.2013 N/A 78.22 SDR SDR 5.00 IDA Energy Sector Clean-Up and Land Reclamation Project 15.05.2013 2013 2.80 SDR 2.00% UniCredit Modernisation of the Kosovar Education System through e-education 27.02.2014 2014 4.93 EUR 1.10% IsDB Financing the Upgrading of the Milloshevë-Mitrovicë M2 Road Project 22.05.2013 2013 13.20 DIN 1.55% + EURIBOR 6m * OFID Upgrading of the Milloshevë-Mitrovica M2 Road Project 05.09.2013 2014 20.00 USD 2.75% SFD High Speed Road Prishtina-Mitrovice Project 03.12.2013 2014 60.00 SAR 2.00% IDA Health Project 15.01.2015 2015 16.50 SDR 2.00% 40.00 40.00 5.00 20.00 20.00 25.00 19.00 19.00 20.00 20.00 25.00 28
29 IDA Energy Efficiency and Renewable Energy Project 15.01.2015 2015 20.10 SDR 2.00% IMF Stand-By Arrangement 2015 29.07.2015 N/A 147.50 SDR 1% + SDR Interest Rate IDA Kosovo Education System Improvement Project 20.11.2015 2016 7.90 SDR 2.00% UniCredit Modernisation of the invasive cardiology services at the University Clinical Center of Kosovo 29.10.2015 2016 2.11 EUR 1.10% EBRD Kosovo Regional Roads 24.12.2015 2016 29.00 EUR 1% + EURIBOR 6m EIB Route 10 Rail Rehabilitation 08.12.2015 2016 42.00 EUR Fix or Variable** NATIXIS Wastewater Treatment Project 19.01.2017 2017 66.00 EUR 0.036% IDA Water Security and Canal Protection Project 27.01.2017 2017 7.00 EUR 1.40% On-Lending Loans KfW Water Supply and Wastewater Disposal, Phase II 07.09.2010 2010 6.00 EUR 0.75% KfW Improvement of Central Heating Systems 14.11.2011 2012 5.00 EUR 8.79% KfW Municipal Water Supply and Wastewater Disposal in Pristina, Phase III 05.06.2012 2012 20.00 EUR 3.20% KfW 400 kv Transmission Line AL-KS 28.12.2009 2010 17.00 EUR 4.82% KfW Improvement of Transmission Network 23.09.2013 2014 5.00 EUR 0.75% 15.50 EUR 3.30% IDA Financial Sector Strengthening and Market Infrastructure Project II 07.09.2010 2011 1.82 SDR 0.75% 25.00 7.00 25.00 15.00 15.00 27.00 35.00 25.00 40.00 15.00 12.00 15.00 40.00 12.00 20.00 29
30 EBRD Kosovo Railway Route 10 Rehabilitation Project 04.09.2015 2016 39.90 EUR 1% + EURIBOR 6m KfW Energy Efficiency Measures in Public Buildings at the Municipality Level in Kosovo 22.01.2016 2016 2.50 EUR 2.25% IDA Water Security and Canal Protection Project 27.01.2017 2017 15.00 EUR 1.40% 15 up to 22 25.00 * According to the financial agreement, during the grace period of three years the loan has variable interest rate of 1.55% + EURIBOR 6 months, and afterwards the creditor will fix the rate by using interest rate swaps. When the rate will be fix, then it will be applied over the loan repayment. ** Based on the financial agreement, the borrower chooses the type of interest for each Tranche at the time of the Disbursement Request, whether the Tranche will be Fixed Rate or Variable Rate. Margin rate (depending on the type of interest) will be set for each Tranche at the time of disbursement. 21.00 30
31 Annex 3. Loans Withdrawals over the years Creditor Project Loan Implemen Agency 2009 2010 2011 2012 2013 2014 2015 2016 2017 Direct Loans IBRD Consolidated Loan C N/A Withdrawals - - - - - - - - - IDA Public Sector Modernization Project MoF, MPA, Withdrawals - - - - 0.24 1.20 1.10 0.75 0.05 PPRC IDA Real Estate Register and Cadastre Project MESP Withdrawals - - - 0.51 1.03 1.18 0.99 0.84 0.21 IMF Stand-By Arrangement 1 N/A Withdrawals - 22.09 - - - - - - - IDA First Sustainable Employment Development Policy Operation N/A Withdrawals - - 5.08 0.04 - - - - - IDA Agriculture and Rural Development Project MAFRD Withdrawals - - - - 3.11 3.85 2.41 2.25 2.37 Financial Sector Strengthening and Market Infrastructure IDA Project I MoF Withdrawals - - - 2.96 - - - - - IMF Stand-By Arrangement 2 N/A Withdrawals - - - 93.64 - - - - - IDA Energy Sector Clean-Up and Land Reclamation Project MESP, KEK JSC Withdrawals - - - - - 0.83 1.68 0.66 - Modernisation of the Kosovar Education System through e- UniCredit Education MEST Withdrawals - - - - - 2.00 0.96 1.43 0.55 IDA Health Project MH Withdrawals - - - - - - 0.03 0.06 2.11 IDA Energy Efficiency and Renewable Energy Project MED Withdrawals - - - - - - 0.02 0.92 2.75 IMF Stand-By Arrangement 2015 N/A Withdrawals - - - - - - 35.64 35.62 100.3 8 IDA Kosovo Education System Improvement Project MEST Withdrawals - - - - - - - 0.05 0.28 UniCredit Modernisation of the invasive cardiology services at the University Clinical Center of Kosovo MH Withdrawals - - - - - - - 2.11 0.00 Financing the Upgrading of the Milloshevë-Mitrovicë M2 IsDB Road Project MI Withdrawals - - - - - - - - 0.10 On-Lending Loans KfW Water Supply and Wastewater Disposal, Phase II KURP Withdrawals - - 0.05 0.09 0.80 1.31 1.67 0.73 0.74 KfW Improvement of Central Heating Systems TERMOKOS Withdrawals - - - - 1.06 3.94 - - - KfW Municipal Water Supply and Wastewater Disposal in Pristina, Phase III KURP Withdrawals - - - - - 2.21 3.55 12.73 1.50 KfW 400 kv Transmission Line AL-KS KOSTT Withdrawals - - - - - - 14.87 2.13-31
32 KfW Improvement of Transmission Network KOSTT Withdrawals - - - - - - 2.39 6.88 11.15 IDA Financial Sector Strengthening and Market Infrastructure Project II CBK Withdrawals - - - - 0.03 0.31 0.31 1.48 0.13 32
33 Annex 4. Debt Service over the years Creditor Project Loan 2009 2010 2011 2012 2013 2014 2015 2016 2017 IBRD IDA IDA Consolidated Loan C Public Sector Modernization Project Real Estate Register and Cadastre Project IMF Stand-By Arrangement 1 IDA IDA IDA First Sustainable Employment Development Policy Operation Agriculture and Rural Development Project Financial Sector Strengthening and Market Infrastructure Project I IMF Stand-By Arrangement 2 IDA Energy Sector Clean-Up and Land Reclamation Project DIRECT LOANS Principal 8.48 10.68 11.99 11.34 11.34 11.34 11.34 11.34 11.34 Interest 0.74 8.53 8.37 8.14 8.94 8.46 7.98 7.50 7.03 Other fees 0 0 0 0 0 0 0 0 0 Principal 0 0 0 0 0 0 0 0 0 Interest 0 0 0 0 0 0.00 0.01 0.02 0.03 Other fees 0 0 0 0 0 0 0 0 0 Principal 0 0 0 0 0 0 0 0 0 Interest 0 0 0 0.00 0.00 0.01 0.02 0.03 0.04 Other fees 0 0 0 0 0 0 0 0 0 Principal 0 0 0 0 2.66 10.71 8.80 0 0 Interest 0 0.06 0.30 0.25 0.23 0.17 0.05 0 0 Other fees 0 0.23 0.06 0 0 0.00 0 0 0 Principal 0 0 0 0 0 0 0 0 0 Interest 0 0 0 0.03 0.04 0.04 0.04 0.04 0.04 Other fees 0 0 0 0 0 0 0 0 0 Principal 0 0 0 0 0 0 0 0 0 Interest 0 0 0 0 0.01 0.03 0.06 0.08 0.10 Other fees 0 0 0 0 0 0 0 0 0 Principal 0 0 0 0 0 0 0 0 0 Interest 0 0 0 0 0.02 0.02 0.02 0.02 0.02 Other fees 0 0 0 0 0 0 0 0 0 Principal 0 0 0 0 0 0 7.40 49.21 41.06 Interest 0 0 0 0.18 0.90 0.98 1.03 0.77 0.35 Other fees 0 0 0 0.47 0.01 0.00 0 0 0 Principal 0 0 0 0 0 0 0 0 Interest 0 0 0 0 0 0.00 0.02 0.05 0.06 Other fees 0 0 0 0 0 0 0 0 0 33
34 UniCredit IDA IDA Modernisation of the Kosovar Education System through e-education Health Project Energy Efficiency and Renewable Energy Project IMF Stand-By Arrangement 2015 UniCredit KfW KfW KfW KfW Principal 0 0 0 0 0 0 0 0 0 Interest 0 0 0 0 0 0.00 0.01 0.02 0.04 Other fees 0 0 0 0 0 0.07 0.01 0.01 0.00 Principal 0 0 0 0 0 0 0 0 0 Interest 0 0 0 0 0 0 0 0.00 0.02 Other fees 0 0 0 0 0 0 0 0 0 Principal 0 0 0 0 0 0 0 0 0 Interest 0 0 0 0 0 0 0 0.00 0.02 Other fees 0 0 0 0 0 0 0 0 0 Principal 0 0 0 0 0 0 0 0 0 Interest 0 0 0 0 0 0 0.10 0.66 1.93 Other fees 0 0 0 0 0 0 0.23 0.34 0.32 Modernisation of the invasive Principal 0 0 0 0 0 0 0 0 0 cardiology services at the University Interest 0 0 0 0 0 0 0 0 0.03 Clinical Center of Kosovo Other fees 0 0 0 0 0 0 0 0.05 0 Total principal of direct loans 8.48 10.68 11.99 11.34 13.99 22.05 27.54 60.55 52.39 Total interest of direct loans 0.74 8.59 8.68 8.60 10.14 9.71 9.35 9.20 9.69 Total other fees of direct loans 0 0.23 0.06 0.47 0.01 0.08 0.24 0.41 0.32 Water Supply and Wastewater Disposal, Phase II Improvement of Central Heating Systems Municipal Water Supply and Wastewater Disposal in Pristina, Phase III 400 kv Transmission Line AL-KS ON-LENDING LOANS Principal 0 0 0 0 0 0 0 0 0 Interest 0 0 0 0.00 0.00 0.01 0.02 0.03 0.04 Other fees 0 0 0 0.03 0.01 0.01 0.01 0.00 0.00 Principal 0 0 0 0 0 0 0.22 0.43 0.43 Interest 0 0 0 0 0.01 0.24 0.43 0.41 0.37 Other fees 0 0 0 0.06 0.01 0.01 0.00 0 0 Principal 0 0 0 0 0 0 1.11 2.22 2.22 Interest 0 0 0 0 0 0 0.07 0.31 0.50 Other fees 0 0 0 0.22 0.05 0.05 0.04 0.02 0.00 Principal 0 0 0 0 0 0 0 2.00 2.00 Interest 0 0 0 0 0 0 0.25 0.75 0.69 Other fees 0 0.18 0.04 0.04 0.04 0.04 0.03 0.00 0 34
35 KfW IDA KfW Improvement of Transmission Network Financial Sector Strengthening and Market Infrastructure Project II Principal 0 0 0 0 0 0 0 0.79 1.58 Interest 0 0 0 0 0 0 0.01 0.08 0.34 Other fees 0 0 0 0 0 0.18 0.05 0.04 0.01 Principal 0 0 0 0 0 0 0 0 0 Interest 0 0 0 0 0 0.00 0.00 0.01 0.02 Other fees 0 0 0 0 0 0 0 0 0 Energy Efficiency Measures in Public Principal 0 0 0 0 0 0 0 0 0 Buildings at the Municipality Level in Interest 0 0 0 0 0 0 0 0 0 Kosovo Other fees 0 0 0 0 0 0 0 0.03 0.01 Total principal of direct loans 0 0 0 0 0 0 1.33 5.45 6.24 Total interest of direct loans 0 0 0 0.00 0.02 0.25 0.79 1.59 1.97 Total other fees of direct loans 0 0.18 0.04 0.35 0.12 0.29 0.13 0.10 0.02 35